Ferrous Metals

Today’s MetalCrawler brings you all the steel news fit to digitally print.

How Big Chinese Mills are Making Money

Plunging iron ore prices are providing a lifeline to some of China’s biggest steel mills and are raising the prospect of a rising tide of exports and increased friction with the European Union, US, India and other export destinations.

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Even as China’s domestic steel demand shrinks and the industry battles chronic overcapacity, lower iron ore prices have helped many large mills post better earnings in 2014 than a year earlier, supported by record exports. Reuters reports that the latest batch of Chinese steel earnings shows just three of 18 big Chinese mills to report so far suffered losses in 2014, down from five the year before. Six of the 13 profit-making mills in 2013 increased profits last year.

Big Chinese mills are able to ship in cheaper seaborne ore direct to their coastal steelmaking operations, selling to customers nearby or shipping steel overseas.

Steel Dynamics Misses

Steel Dynamics Inc. recently reported first-quarter net earnings of $30.8 million or $0.13 per share compared with $38.6 million or $0.17 per share last year.

Excluding items, adjusted earnings for the quarter were $0.17 per share . Revenues for the quarter were $2.05 billion compared with $1.83 billion in the prior year. Analysts polled by Thomson Reuters estimated earnings of $0.15 per share on revenues of $2.15 billion for the quarter.


The price estimate of discarded metals; including gold, silver, iron and copper, according to the UN’s Global E-Waste Monitor 2014 report is $52 billion in 2014, alone.

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The gold itself was valued at about $11.2 billion. Some researchers, according to the report felt that in many cases, it made sense to recover the metals.

More Scrap Recycling Needed

Not much was diverted for recycling. Only about one-sixth of last year’s e-waste was moved from landfills for reuse, according to the report.


This week, the UK’s Metalysis and GKN Aerospace announced a bold, new process that’s a significant step forward in the adoption of 3D printing/additive manufacturing for aerospace. The advance will allow users to essentially sinter titanium from rutile powder, a process that previously could be accomplished with only lighter metals.

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The cost of the powder in 3D parts makes up roughly 50% of the final cost so a significant reduction in powder costs could be a major spur to the adoption of such technology in more applications and in industries beyond aerospace and medical devices, such as automotive.


Today in MetalCrawler, the sleepy iron ore market was jolted to life. Is it a shift from the bearish trends we’ve seen lately? Only time will tell.

BHP Dials Back Mining Expansion

Iron ore advanced after BHP Billiton Ltd. curbed expansion plans and supplies from higher-cost mines dropped, easing concern that global output will outpace demand and feed a global glut. Miners’ shares jumped.

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Ore with 62% content at Qingdao, China, rose 5.5% to $57.81 a metric ton early today, its highest since March 16. Benchmark iron ore is still 60% below the peak of $144.18 reached in August 2013. Visit our MetalMiner Indx for the latest prices.

Exports Fall for the Quarter

The Sydney Morning Herald’s Peter Ker writes that the week’s iron ore moves could have a major impact on markets if other producers follow BHP’s lead and constrain supply. Across Rio Tinto Group, Vale SA, Fortescue Metals Group, Arrium Limited, Mt. Gibson Iron and Grange Resources, exports were more than 19 million mt lower this quarter than in the December quarter, raising questions about why the iron ore price has fallen 28% during a period of supply weakness.


It’s here! At 9 a.m. CT/10 a.m. ET today (register here, now) Lisa Reisman of MetalMiner and Ian Krol of Bolero (along with MetalMiner’s Stuart Burns and David Gustin of Trade Financing Matters) are about to rock your world on the following: – A 3- and 6-month forecast for major metals including: steel, aluminum, copper and […]


Although MetalMiner’s “crystal ball” may be going through a few tweaks and changes – and you, the readers, will be first to know when it goes down – we still want to give you a preview of our steel and stainless steel price forecasts before our free live webinar tomorrow, Friday April 24, where you’ll get our […]


The American Institute of Architects‘ Architecture Billings Index came in positive, again, in March, but its relatively low increase again reflected the weak recovery in both design and construction. The March ABI score was 51.7, up from a mark of 50.4 in February.

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“Business conditions at architecture firms generally are quite healthy across the country. However, billings at firms in the Northeast were set back with the severe weather conditions, and this weakness is apparent in the March figures,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “The multi-family residential market has seen its first occurrence of back-to-back negative months for the first time since 2011, while the institutional and commercial sectors are both on solid footing.”

Multi-Family Weakness

We have reported on the general weakness in multi-family residential and its effect on prices of construction materials such as structural steel and copper for much of the first quarter of 2015.

AIA prepared a video featuring Baker, recorded in a swanky Architect Magazine studio overlooking our nation’s capital, describing the macroeconomic issues facing the construction market, which include the strong dollar and the continuing shortage of skilled construction labor, in Q2 and the rest of the year.

It’s first quarter earnings day here at MetalCrawler, with major producers mostly taking a hit due to foreign steel exports and low prices.

Nucor’s Big Hit

Nucor Corp., the No. 1 US steelmaker by market value, reported a 39% drop in quarterly profit, hurt by lower selling prices. Net income attributable to Nucor fell to $67.8 million, or 21 cents per share, in the first quarter ended April 4, from $111.0 million, or 35 cents per share, a year earlier.

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Net sales fell nearly 14% to $4.40 billion.

ATI, Too

Allegheny Technologies, Inc., issued its quarterly earnings data on Tuesday. The company reported $0.09 earnings per share for the quarter, missing the consensus estimate of $0.10 by $0.01, AnalystRatings.Net reported. The company had revenue of $1.13 billion for the quarter, compared to the consensus estimate of $1.07 billion. During the same quarter in the previous year, the company posted ($0.17) earnings per share. The company’s revenue for the quarter was up 14% on a year-over-year basis even though first quarter profit was down.


Steel mill utilization rates dropped to below 70% in March and have stayed there. U.S. Steel, ArcelorMittal and Evraz have all idled mills, while many others have cut utilization amid weak steel demand (particularly anything exposed to oil and gas tubular markets) and high inventories of flat steel products.

Steel imports are still arriving, but will slow sharply in the second quarter and through the remainder of the year as US steel prices are no longer priced significantly above markets in the rest of the world. Weaker-than-expected US manufacturing data will also mean that it will take some time to work those inventories off. As such, we don’t expect US steel mills to reboot until September or so.

Weak Demand

Weak demand and plentiful supply means a continuation of low prices.

However, the fundamental position is driven by the competition with pig iron – scrap’s core substitute. Here iron ore continues to slide as China acts to protect its own producers while international suppliers’ output piles up. The bankruptcies/closures seen so far (Atlas in Australia, Cliffs in Canada) are nowhere near enough to balance the market.

Until a bigger supply response is seen (and there will have to be one at some point), the price will move inexorably downwards. Despite the downward adjustment of scrap prices seen so far this year, it is still more cost-effective on a global basis to make steel using iron ore than scrap. That will mean further weakness for scrap-based electric arc furnaces around the world as they switch to either pig iron or billet as their primary raw material. If global scrap prices fall again, US exporters will sell more to the domestic market and hence our concern that $250 per ton is not the floor for US scrap prices.


Today in, MetalCrawler, steel growth is expected to slow down this year and the Obama administration wants pipeline repairs.

WSA Expects Steel Growth to Slow

Steel use will grow more slowly, according to the World Steel Association, thanks to the production slowdown in China.

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“We hear increasingly positive use from developed economies, especially … the euro zone. In the developing world we see increased optimism about India and growth in the Middle East and North Africa and Association of Southeast Asian Nations countries,” said Hans Jurgen Kerkhoff, chairman of the group’s Economics Committee.

“While these developments will not be enough to counter-balance the deceleration of China, we expect to see gradually improving growth prospects beyond 2016,” he told Reuters.

Global apparent steel use – steel both known and assumed to have been used – is expected to grow by 0.5 percent this year to 1.544 billion metric tons, compared with growth of 0.6 percent last year, Worldsteel said.

Obama Administration Proposes Pipeline Overhaul

The Obama administration on Tuesday proposed spending as much as $3.5 billion to replace aging natural gas pipelines nationwide. The amount of money the administration is proposing is just a fraction of what it would take to replace the hundreds of thousands of miles of decades-old cast-iron and bare-steel natural gas distribution pipes — the lines that are considered most vulnerable to ruptures. A full replacement would cost $270 billion, a 348-page government report accompanying the request says.

Matt Sparks, a spokesman for House Majority Leader Kevin McCarthy (R.-Calif.), pointed to three oil and gas infrastructure bills that the chamber has already passed with Democratic support this year, including a measure that President Barack Obama vetoed that would have approved construction of the Keystone XL oil pipeline. “If the administration is serious about securing our energy future, a good start might be” by working with Republicans on those bills, he told Politico via email.